About the companyTTML is headed under the renowned group of TATA.The compnay is engaged in telecoms services.The COmpany holds 38% Stake in TATA INDICOM.It was formed after acquisition of the erstwhile Hughes Telecom (India), and was then renamed as Tata Teleservices (Maharashtra) and offers telecom services using CDMA technology.
Overview
It is licensed to provide telecommunication services in the states of Maharashtra (including Mumbai) and Goa.
It has invested about Rs.3,000 crore in state-of-the-art infrastructure in these states.It has over 1.29 million customers in Maharashtra and Goa and offers telephony and ISP services in the cities of Mumbai and Navi Mumbai, and 137 towns across Maharashtra.
Financials
The financial performance has been consistently bad.Its performance for the first quarter ended 30th June 2008 has been bad, as expected. Look at it from any angle, be it QoQ or YoY, the performance is bad. On a QoQ basis, the net sales of the company rose 4.88% at Rs.477.96 crore. The company’s EBIDTA was at Rs.154.89 crore, up by just 3% but this has been its highest EBIDTA. OPM, on QoQ fell but on YoY rose from 25.52% to 32.41%.
The total expenditure stood at Rs.464.09 crore of which 25% was on account of depreciation, another 26% was due to interconnect and access costs. The company spent Rs.70.89 crore on marketing and promotional costs.
Even after the interest outgo of Rs.75.32 crore, the company managed to stay in the positive zone but it was only after this that company slipped into the red; the main culprit being the big bill of Rs.114.09 crore on account of depreciation. This ate away most of the margins and dragged the company into losses. This has always been the trend, that’s the “consistency” factor at work here. So at the end of it all, the company reported net loss of Rs.34.71 crore as against a loss of Rs.20.59 crore in Q4FY08.During the Quarter ended June 30, 2008; "Foreign Currency Convertible Bond(FCCB)" holders holding Bonds of the value aggregating to $ 2.00 million exercised their option to convert their holding to equity, thus resulting in an increase in the paid up equity share capital by Rs.3.63 crore.
About The Stock
The stock has been most fancied stock among the traders being TTML a range bound stock for long period. It cycle was fixed , whereby trader start accumulating at lower range and dispose it off near its highest point.During the rally the stock also break its life time high and was success to make new highs and became popular among the investors.
The stock is currently quoted at Rs.22 and this has certainly come down from a high of Rs.65 it had touched in January, which was in anticipation that the company might manage to turnaround.
I do not recommend to make any investment in this stock at any levels , though may be opted for short term trading.In telecom sector investment in Bharti , MTNL and R Com would be better choice.